iPhone beats Droid in Manhattan speed tests

Note to New Yorkers: Carry your new Droid phone to Wall Street, Grand Central Terminal, Union Square, or Madison Square Park, and you may find AT&T iPhone users — the ones who are always complaining — are actually downloading data at four times the speed of your Verizon phone.

A new report from mid-market investment banking firm Piper Jaffray rebuts the notion that the new Verizon Droid phone gives better service than AT&T’s iPhones. The three analyst authors summarized, “While there were certainly locations where the iPhone was bested by the Droid, two-thirds of the time the iPhone had much better throughput.” They went on to rate AT&T’s stock as overweight, meaning you should buy more of it despite the conventional wisdom that AT&T’s iPhone deal with Apple has brought down the company’s value.

At Grand Central Terminal, the report says, the average network speed for an AT&T iPhone was 981 kilobits per second (kbps) in five time trials. That proved more than 50% faster on average than a Verizon Droid tested at the same spot. On Wall Street, the iPhone nearly tripled the Droid’s speed, beating it with 899 kbps versus 309 kbps.

The report, obtained by VentureBeat, goes further than last weekend’s New York Times story that cited several studies which found AT&T’s network speed to be faster than Verizon’s. None of those reports tested an iPhone and a Droid head to head. Instead, experts told the Times that AT&T’s network was fast, and that customer gripes were probably due to the Apple phone’s supposedly weak wireless range and speed compared to other mobile phones. (I’ve anecdotally heard from professional wireless network engineers that the iPhone doesn’t pick up and receive wireless signal as well as other phones on the same network. “It’s a weak transceiver,” one said.)

The news in Piper Jaffray’s report is different: It says that despite any weakness in the iPhone, despite iPhone overcrowding in Manhattan, and despite the claimed superior speed of the newer Droid (“racehorse duct-taped to a Scud missile,” one TV ad says), an iPhone user in Manhattan still gets much better network speed in two-thirds of the Manhattan locations tested by Piper’s analysts.

The Droid did better in Times Square, Central Park, and Rockefeller Center, among other locations. The iPhone failed the worst in Times Square, missing its connection on two of five time trials and crawling to an average 39 kbps, versus the Droid’s 703 kbps.

AT&T and Verizon won’t comment on the report directly. AT&T told Piper Jaffray that the company is nationally adding 2,000 new cell sites and 100,000 new circuits for backhaul and allocating more of its 850 MHz wireless spectrum capacity towards faster 3G services. But New York City was left out of the company’s recent pledge to boost 3G service in several U.S. cities.